China Cuts New Loans by 50 Percent to $102.5 Billion

Chinese banks extended about 700 billion yuan ($102.5 billion) in new loans in February, half that of January, as the government clampdown on lending took hold, state media said on Wednesday.

The figure reported by the official China Securities Journal, down from 1.39 trillion yuan the month before, is in line with forecasts.

Economists polled by Reuters expect new lending for February to fall to 675 billion yuan, moderating from the first month of the year in the wake of a government clampdown on credit.

Official figures are due sometime before March 15, though there is no set time for their release.

The slowdown came on the heels of orders by authorities for banks to rein in lending, and was also due in part to the week-long Lunar New Year holiday, which fell in mid-February, the newspaper said, citing unnamed sources.

The market is closely watching the loan data to judge how serious Beijing will be in controlling the jump in lending seen at the start of the year, and the relatively moderate figure could ease concerns over further rises in banks' required reserves, which in past months have hurt stock prices.

Premier Wen Jiabao last week confirmed a 2010 loan target of 7.5 trillion yuan, down from 9.6 trillion in 2009.

Beijing has repeatedly ordered banks to lend at a steady rhythm throughout the year, avoiding bunching, and to recall loans that are being inappropriately used -- for example to invest in stocks or property.

Even so, banks typically load up most of their new lending in the early part of the year, in part to extend the loans before anticipated government curbs.

The newspaper gave the following breakdown of new lending in February by the "Big Four" state lenders: